Can Fitstop assign the Franchise Agreement?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
incapacity of you, your estate must comply with the terms and conditions of this Agreement. Under no conditions will such compliance be excused or reduced because of the death or incapacity of you.
- 15.14 The transfer of this Franchise upon written notice by an individual or partnership to a corporation wholly-owned by the preexisting owner or all preexisting owners of this Franchise shall not require our approval nor the payment of the application or transfer fees. However, the transferring owner or owners must agree to remain personally responsible to us for your performance of the terms and conditions of this Agreement. The absence of any additional written agreements and/or guarantees concerning the transfer will not affect the continuing liability of the transferring owner or owners of this Franchise. We may impose similar requirements on any proposed transfer of this Franchise to a trust.
- 15.15 If the transfer is an assignment of the Franchise by an individual to a corporation in which you are and, so long as they remain the majority stockholder and the officer responsible for the full-time personal operation and supervision of the Franchise, and the transfer does not result in the cumulative transfer of over 50% of the interest or interests of the original owner or owners, the Application Fee will be charged without the Transfer Fee. However, we require that the transferor, or transferors and each of them, personally guarantee all obligations of the Franchise and reserve the right to reasonably reject such transfer.
- ©2024 Fitstop USA, Inc. 15.16 Involuntary transfers of this Agreement or the assets of the Franchise, such as by legal process, are not permitted, are not binding on us, and are grounds for the termination of this Agreement.
Your use of this Agreement as security for a loan or other similar encumbrance is prohibited, unless we specifically consent to any such action in writing prior to the proposed transaction.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
Based on the 2024 Fitstop Franchise Disclosure Document, the agreement outlines specific conditions regarding the transfer of the franchise. A transfer to a corporation wholly-owned by the existing owner(s) does not require Fitstop's approval or the payment of application or transfer fees, provided the transferring owner(s) remain personally responsible for the agreement's terms. Fitstop may impose similar requirements if the transfer is to a trust.
If an individual franchisee transfers the franchise to a corporation where they remain the majority stockholder and are responsible for the franchise's full-time operation, only the Application Fee (and not the Transfer Fee) will be charged. However, Fitstop requires the transferor(s) to personally guarantee all franchise obligations and reserves the right to reasonably reject such a transfer.
Involuntary transfers of the agreement or franchise assets, such as through legal processes, are not permitted and can be grounds for termination of the agreement. Additionally, using the agreement as security for a loan is prohibited without Fitstop's written consent. These provisions protect Fitstop's interests by ensuring that any transfer maintains responsible and capable management while adhering to the brand's standards.